Exhibit 10.3


 


SIMPSON MANUFACTURING CO., INC.

EXECUTIVE OFFICER CASH PROFIT SHARING PLAN


 


Adopted January 14,
2003


and
Amended through February 25, 2008


 


Purpose


 


The purpose of this Plan is to recognize outstanding
effort and achievement by executive officers of Simpson Manufacturing Co., Inc.
and its subsidiaries (together, the “Company”). 
The Plan is intended to provide qualified performance-based compensation
in accordance with section 162(m) of the Internal Revenue Code of 1986, as
amended, and the regulations and interpretations thereunder (the “Code”).


 


Committee


 


The Plan shall be administered by a Compensation
Committee (the “Committee”) of the Board of Directors of the Company.  The Committee shall consist of at least two
outside directors of the Company who satisfy the requirements of Code section
162(m).  The Committee shall have the
sole discretion and authority to administer and interpret the Plan in
accordance with Code section 162(m).


 


Covered Employees


 


Any employee of the Company treated as a “covered
employee” pursuant to section 162(m) of the Code, as amended and as
interpreted in Treasury Regulations and notices or other rulings issued by the
Internal Revenue Service, and any other employee of the Company designated by
the Committee.


 


Amount of Award


 


The Committee will determine the amount of the award
that each covered employee will be eligible to receive under the Plan each
fiscal quarter.  Awards will be based on
a percentage of the amount by which net profits of the Company or a branch or
subsidiary of the Company for a fiscal quarter exceed a qualifying level of net
profits for the Company or such branch or subsidiary, respectively, for that
fiscal quarter.  The results for each
fiscal quarter will be determined independently of the results for any other
fiscal quarter; profits or losses in one fiscal quarter will not be used to
calculate net profits in any subsequent fiscal quarter.


 


The Committee shall set the standards for determining
net profits, the qualifying levels and the percentages of excess profits that
covered employees are eligible to receive with respect to a fiscal quarter, no
later than the latest time permitted by the Code for that fiscal quarter.  Qualifying levels will be based on the value
of net operating assets of the Company, the branch or the subsidiary,
multiplied by a rate of return on those assets. 
Individual percentages will be based on job function.


 


No award in excess of $2,500,000 will be paid to any
covered employee under this Plan with respect to any fiscal year.  The Committee, in its sole discretion, may
reduce or eliminate the award to any covered employee in any year.  The reduction in the amount of an award to
any covered employee shall not, however, affect the amount of the award to any
other covered employee.


 


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Payment of Awards


 


Awards will be paid quarterly, within five weeks of
the last day of the fiscal quarter.  No
bonus shall be paid unless and until the Committee certifies in writing that
the performance goals of the Plan are satisfied.


 


No covered employee is eligible to receive an award
under the Plan until he or she works an entire fiscal quarter for the
Company.  Anyone who is terminated by the
Company without cause, as determined by the Committee in its sole discretion,
dies, is on disability or voluntarily quits the Company before the last day of
a fiscal quarter, will be paid on a pro-rata basis for the days actually worked
in that fiscal quarter.


 


Scope of the Plan


 


Nothing in this Plan shall be construed as precluding
or prohibiting the Company from establishing or maintaining other bonus or
compensation arrangements, which may be applicable to all employees and
officers or applicable only to selected employees or officers; provided, however,
that an individual who receives an award under this Plan with respect to a
fiscal quarter shall not be permitted to participate in any other bonus
arrangement or plan of the Company for that fiscal quarter that provides
bonuses similarly calculated as a percentage of profits in excess of a
qualifying level.


 


Amendment and Termination


 


The Company reserves the right to amend or terminate
this Plan at any time with respect to future services of covered
employees.  Plan amendments will require
stockholder approval only to the extent required by applicable law.


 


General


 


The establishment of the Plan shall not confer any
legal right on any covered employee or other person to continued employment,
nor shall it interfere with the right of the Company to discharge any covered
employee and treat him or her without regard to the effect that such treatment
might have on him or her as a participant in the Plan.  The laws of the State of California will
govern any legal dispute involving the Plan.


 


No Funding


 


The Company shall not be required to fund or otherwise
segregate any cash or any other assets that may at any time be paid to
participants under the Plan.  The Plan
shall constitute an “unfunded” plan of the Company.  Neither the Company nor the Committee shall,
by any provision of the Plan, be deemed to be a trustee of any property, and
any obligations of the Company to any participant under the Plan shall be those
of a debtor and any rights of any participant or former participant shall be
limited to those of a general unsecured creditor.


 


Non-Transferability of Benefits and Interests


 


Except as expressly provided by the Committee, no
benefit payable under the Plan shall be subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance or charge, and any
such attempted action shall be void.  No
benefit payable under the Plan shall be in any manner liable for or subject to
debts, contracts, liabilities, engagements or torts of any participant or
former participant.  This section shall
not apply to an assignment of a contingency or payment due after the death of
the covered employee to the deceased covered employee’s legal representative or
beneficiary.


 


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